There are three main dependency types:
As a tl;dr - Dependencies are required to run, Dev Dependencies are only required to develop. Peer Dependencies are Dependencies required by your Dependencies.
Installed directly and transitively. Installing foo in your project will install foo's Dependencies. If A requires B, and B requires C, then C gets installed, otherwise, B could not work, and neither would A.
Installed directly, not installed transitively. Installing foo in your project will not install foo's Dev Dependencies. We don't need to test B to test A, so B's testing dependencies can be left out.
Additionally, running npm install in production mode, or running npm install --prune will not install Dev Dependencies directly.
Peer Dependencies are automatically installed in npm 7+ [[20230315102941-npm-7-peer-dependencies]]. Usually used for plugins, kind of like an [[20210705094040-inversion-of-control]] The plugin itself doesn't use the Peer Dependency ('host'), but the developer usually puts the two together. Thus the plugin states its compatibility, but relies on the developer to use the host and plug the two together.
#todo - Are you able to import from/use a specified peer dependency? I would imagine no - otherwise it's a regular dependency. Using it for tests might be a weird middle ground